Demands for Automatic Rate Relief

Since December 2005, small businesses in England and Wales have been entitled to claim up to 50% rate relief from their local authority, if the rateable value of their premises is less than £15,000 (£21,500 in London). The relief is paid for by a premium charged on the business rate for larger firms.

Research suggests, however, that hundreds of millions of pounds of rate relief is going unclaimed. A 2006 report by the Local Government Association, for example, found that £400 million in rate relief was unclaimed in England each year.

The Government attempted to simplify the claims system in 2007, but a February 2008 survey by the FSB found that £48.4 million was still unclaimed in Essex alone. Other surveys suggest the pattern is repeated across the country. FSB spokesman Stephen Alambritis said:

“We have been lobbying government for the past year and have now sent a letter to the Prime Minister. We are hoping that the rate relief will be automatically applied to rate bills as part of the economic revival package promised by Alistair Darling”.

“When the relief was announced in 2005, it was budgeted for, so it shouldn’t have any implications for the Government. The money is there, it is just not being claimed. In the meantime, we would urge businesses to query their business rate bill with their town hall, and to phone up and ask if they qualify.”

Chartered surveyor LeaseholdersUnited claims that the reason so much relief goes unclaimed is that many local authority websites do not display clear information about small business rate relief or how to make a claim. LeaseholdersUnited’s head of marketing Nick Brown said:

“When you go on to the council sites, you can’t find the form because it’s hidden in a section called ‘business finance’. Very often you can’t download the forms, and it doesn’t say when the deadline is.

“Perhaps most importantly, we’re yet to come across a site which allows you to backdate a claim and claim for all three years at once.” The firm has created a simple computer application for small businesses to find out how much rate relief they are eligible for, alongside a claim form with a pre-printed address.

“Last year the Government collected £93 million from larger businesses but has not handed it out, and this year it’s £104 million, so it is sitting on £200m which it has taken out of our local economies,” Brown added.

“While it is for local councils to promote the scheme to local businesses, we would always encourage eligible small businesses to apply for the relief,” said a CLG spokesperson.

“From April 2007 we made it easier for them to do so – instead of having to apply for the relief each year, applications can now cover more than one year and businesses that qualify have until September 2010 to do so.”

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